How To Improve Your Credit Scores To Qualify For Mortgage

This BLOG On How To Improve Your Credit Scores To Qualify For Mortgage Was UPDATED On August 6, 2017

There are many ways on How To Improve Your Credit Scores To Qualify For Mortgage. It is not too difficult and many times, just applying a few simple techniques can do wonders.

  • Remember that credit disputes are no permitted during mortgage process.
  • All credit disputes with any credit reporting agencies needs to be retracted if borrowers intend on applying for a mortgage loan. 
  • However, those who just filed bankruptcy or had a recent foreclosure and are starting a credit repair program, whether it is done on their own or by hiring a credit repair company, there are things they should know how certain derogatory credit deletions can affect the mortgage process.
  • There are ways of improving credit scores also by simply paying down credit card balances and obtaining new credit. 
  • One of the most effective ways of boosting credit scores is by getting three secured credit cards with a $500 credit limit on each secured credit card. 
  • Each secured credit card can boost credit scores by at least 20 or more points. 
  • Some have seen their credit scores increase as much as 100 points with just three secured credit cards in a matter of just a few months. 
  • Remember to keep credit card balances below the 10% balance limit for maximum optimization. 
  • Another thing to need to keep in mind is that high balances on credit cards will lower credit scores.

How Derogatory Items Affect Credit Scores

By reducing a revolving credit account balance below the 10% credit limit can improve credit scores by 10 to 30 points for consumers who have multiple open revolving credit accounts.

  • For those with only 2 or less revolving credit accounts, reducing credit account balance below the 10% credit balance limit will improve credit scores by 15 to 40 points. 
  •  Recent collection account can drop credit scores by 50 to 70 points.

Impact Of Late Payments On Credit Scores

A recent late payment can drop credit scores by 50 or more points.

  • A recent mortgage payment that has been 30 days late can drop scores by 70 to 90 points. 
  • A recent mortgage payment that has been 90 days late will drop credit scores 70 to 90 points.

Impact Of Short Sale And Deed In Lieu On Your Credit Scores

A recent short sale or deed in lieu of foreclosure can easily drop scores any deficiency credit scores by more than 80 points.

  • However, as the short sale and deed in lieu of foreclosure ages, the consumer credit scores will eventually increase.
  • A bankruptcy on credit report can drop credit scores by 150 to 200 points.
  • Again, as the bankruptcy ages and time passes, consumer credit scores will go back up.

Credit Repair And Re-Establishing Credit

Credit and credit scores is probably the most important thing one can do after periods of bad credit or after bankruptcy and/or foreclosure.

  • It is as important as monitoring banking accounts. 
  • Having bad credit can cost thousands, if not hundreds of thousands, of dollars in higher mortgage rates on mortgage, credit card interest payments, and insurance premiums. 
  • Many insurance companies will deny insurance for bad credit. 
  • Others can charge substantially more in insurance premiums for having bad credit. 
  • Many employers now check candidate’s credit during their hiring and promotional process. 
  • Consumers who need additional credit advice, visit Credit Fix Advisors a national credit informational super website.

Related> How I Can I Improve Low Credit Scores?

Related> Improving Credit Scores To Qualify For Mortgages

Related> Tips In Improving Credit Scores

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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